Kyrgyz Republic Resident Representative Site
Resident Representative Office in Kyrgyz Republic
This web page presents information about the work of the IMF in Kyrgyz Republic, including the activities of the IMF Resident Representative Office. Additional information can be found on the Kyrgyz Republic and IMF country page, including IMF reports and Executive Board documents that deal with Kyrgyz Republic.
News — Highlights
Kyrgyz Republic and the IMF
August 12, 2014
Series: Country Report No. 14/247
Kyrgyz Republic: Sixth Review Under the Three-Year Arrangement Under the Extended Credit Facility; Staff Report; and Press Release
Regional Economic Outlook Update: Middle East & Central Asia
A large and possibly persistent decline in oil prices, and slower-than-projected growth in the euro area, China, Japan, and Russia, have substantially altered the economic context for countries in the Middle East and Central Asia. The appropriate policy response will depend on whether a country is an oil exporter or importer. A common theme, however, is that these developments present both an opportunity and an impetus to reform energy subsidies and step up structural reform efforts to support jobs and growth.
Lower oil prices have weakened the external and fiscal balances of oil exporters, including members of the Gulf Cooperation Council (GCC). Large buffers and available financing should allow most oil exporters to avoid sharp cuts in government spending, limiting the impact on near-term growth and financial stability. Oil exporters should prudently treat the oil price decline as largely permanent and adjust their medium-term fiscal consolidation plans so as to prevent major erosion of their buffers and to ensure intergenerational equity.
Gains from lower oil prices provide much-needed breathing space for oil importers but will be offset by a concurrent decline in external demand, particularly from Russia, but also from the euro area and China. Russia's sharp slowdown and currency depreciation have weakened the outlook for the Caucasus and Central Asia (CCA) because of strong linkages through trade, remittances, and foreign direct investment, suggesting the need for greater exchange rate flexibility and near-term fiscal easing where financing allows, along with stepped-up reform efforts.